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PA Revenue Picture Brightens

By Michael Wood, PA Budget and Policy Center

Pennsylvania tax collections came in better than expected in March, lowering the state's total revenue shortfall for the current fiscal year. It was also the first March ever in which tax collections exceeded the $4 billion mark. 

With three months left in the 2011-12 fiscal year, the revenue shortfall stands at $387 million, much lower than the year-end revenue shortfall of $719 million estimated by the Corbett administration and built into his 2012-13 budget.

General Fund Revenue Shortfall

This should be welcome news as lawmakers move closer to negotiating a 2012-13 state budget. Improved collections may signal a less severe year-end shortfall, and that could help reduce some of the painful cuts proposed in the Governor's budget. Get the Pennsylvania Budget and Policy Center's full revenue analysis here.

March is an important revenue month for a number of reasons. For one, almost half of corporate tax collections for the year were collected last month. And corporate taxes exceeded monthly estimates by $106 million, or nearly 5%, last month. This played a big role in creating a March revenue surplus of $95 million.

After the strong March collections, every major tax type now exceeds year-to-date tax collections this time last year. Taxes are now $583 million higher than they were at the end of March 2011 — a sign of the improving economy.

Tax Breaks Vs. Budget Cuts

By Chris Lilienthal, Third and State

Right now in Harrisburg, there is a debate going on over whether the state should make more cuts to schools, universities and protections for our children and grandparents. Unfortunately, the Governor has put forth a budget that would do just that.

The chart below from Better Choices for Pennsylvania compares existing tax loopholes with funding cuts that could be restored by closing loopholes. In each case, additional revenue could help fund vital services without raising taxes on the middle class.

Dumb and Dumber State Construction Policies

By Stephen Herzenberg, Third and State

I've got an idea: let's employ low-wage, low-skill, and sometime out-of-state workers on small and medium-sized state-funded construction projects, with no benefit to taxpayers and negative impacts on local economies.

Sound like a stupid idea? That's because it is.

Here's the backdrop: Pennsylvania's prevailing wage law requires that workers on state-funded construction projects be paid a wage in line with what most other workers in their trade are paid within a certain geographical area.

Research in peer-refereed academic publications shows that the law could be called the quality construction law because it helps ensure the use of skilled workers on state projects. Where prevailing wage laws exist, training investment, worker experience, wages, benefits, and safety levels are all higher than where these laws do not exist.

Overall construction costs are the same with or without prevailing wage laws. The prevailing wage law, however, makes it impossible for contractors that employ low-wage, out-of-state workers to win bids on state projects: it ensures that jobs go to local workers, who spend their money at local businesses.

More middle-class jobs, stronger local economies, higher quality construction, no cost to taxpayers: what's not to like?

Unfortunately, some members of the Pennsylvania Legislature seem unwilling to leave well enough alone. Through House Bill 1329, these lawmakers want to make the prevailing wage law to apply to less state-funded construction work. How so? By exempting projects of less than $185,000 from prevailing wage standards. Currently, the law applies to all state-funded projects of $25,000 or higher.

Cohen and Josephs for State Representative

There are some difficult State Representative races for progressives in the city this year. In two of them, long time advocates of progressive causes, Babette Josephs in the 182nd and Mark Cohen in the 200th , are in races with younger and ambitious challengers, Brian Sims and Numa St. Louis.

How do you choose between candidates who have no differences on issues?

There are few if any differences on policy between the incumbents and the challengers. Babette and Mark simply have the best voting records in Harrisburg. (When I ran my own race as a challenger and was looking to find questionable votes taken by my opponent, Rosita Youngblood, I quickly compared her votes to those of Cohen and Josephs. There were many differences and, in each case, Cohen and Josephs had taken the progressive view.)

So when there are no issue differences, how do you make up your mind in a race like this?

Well, you could simply choose the candidate to whom you are personally closest. In that case, I would definitely endorse Brian Sims in the 182nd. We were colleagues at CPL and I really like and admire him. He is smart and energetic and will be a great political leader someday. I don’t know Numa St. Louis as well but I like what I’ve seen of him.

And there have been times when I’ve gotten into conflicts with both Babette Josephs and Mark Cohen. When I spoke for Mark at an ADA meeting a week or so ago, his sister Sherrie reminded me that Mark and I once got into a very loud public disagreement. And Babette and I have not seen eye to eye at times either. (In particular, I very much wanted her support when I ran for City Council and did not get it.)

Reaching out to the grassroots

Prevailing Wage Opponents Fail to Look at the Research

The Final Part of a Three-part Series on Prevailing Wage by Mark Price and originally published at Third and State. Read Part 1. Read Part 2.

In the first two posts of this series, I explained why the numbers being tossed around by advocates of repealing prevailing wage don’t add up. I explained that the claims of cost-savings are not based on any actual experience and that they represent the result of laughable hypothetical, or “what if,” calculations. 

This leads to the most important point that the Pennsylvania School Boards Association, the Pennsylvania State Association of Boroughs, the Harrisburg Patriot-News Editorial Board and others keep missing: we can do much better than a hypothetical when assessing the impact of prevailing wage laws.

There is a body of research that examines construction costs (and other construction outcomes, like safety, training investment, wages, benefits, etc.) in states with and without prevailing wage laws as well as in states that eliminated prevailing wage laws. We don’t have to conjecture what “might” happen: we can look at what did happen. The preponderance of the evidence shows that prevailing wage laws do not raise construction costs.

Back in the late 1990s, Pennsylvania actually ran this real-world experiment itself — we lowered our prevailing wage levels, particularly in rural areas. That means we can look at what happened to construction costs. What happened is the same thing that has happened in other places — lower prevailing wages did not translate into lower construction costs. 

Prevailing Wage Opponents Fail Labor Market Statistics 101

Part Two of a Three-part Series on Prevailing Wage by Mark Price, originally published at Third and State. Read Part 1.

The overwhelming weight of evidence based on the actual cost of public construction projects shows that prevailing wage laws do not raise costs. Therefore, advocates of repealing the law in Pennsylvania ignore this evidence. Instead of “evidence-based policy,” we have “lack-of-evidence-based policy.” Go figure.

Repeal advocates use a hypothetical calculation that makes assumptions about cost, rather than empirically examining the relationship between higher wages and total construction costs. (As discussed here, even these hypothetical cost estimates don’t make sense once you apply real world data to how much labor costs represent of total construction cost.)

Another key ingredient in the hypothetical calculations used by proponents of repeal is the claim made most recently by the Pennsylvania State Association of Boroughs (PSAB) that “the prevailing wage is 30 percent to 60 percent higher than the average wage for the same occupation.”

Prevailing Wage Opponents Fail the Laugh Test

Part One of a Three-part Series on Prevailing Wage by Mark Price and originally published at Third and State.

Prevailing wage laws have long operated nationally and in states as a check against the tendency of the construction industry to degenerate into destructive wage and price competition. Such competition can drive skilled and experienced workers from the industry, reduce productivity and quality, and lead to poverty-level jobs, all without saving construction customers any money.

In an exhaustive review of the research on the impact of prevailing wages on contracting costs, Nooshin Mahalia concluded:

At this point in the evolution of the literature on the effect of prevailing wage regulations on government contract costs, the weight of the evidence is strongly on the side that there is no adverse impact. Almost all of the studies that have found otherwise use hypothetical models that fail to empirically address the question at hand. Moreover, the studies that have incorporated the full benefits of higher wages in public construction suggest that there are, in fact, substantial, calculable, positive benefits of prevailing wage laws.

Although the weight of evidence suggests prevailing wage laws do not raise costs, advocates for repealing the law in Pennsylvania continue to repeat some version of the following:

Nowhere to Go, More Addicts on the Street and a Ringing Irony

Based on blog posts by Chris Lilienthal originally published here and here at Third and State.

The Philadelphia Inquirer reports this morning on the impact of Pennsylvania Governor Tom Corbett's proposed budget cuts on the lives of people in Southeastern Pennsylvania. Who is getting hit? Adults with disabilities, the homeless, people with mental-health illnesses, HIV patients needing hospice care, children aging out of foster care, and seniors, among others.

Miriam Hill, The Philadelphia InquirerPeople who will be affected by Corbett's cuts:

Brittany Stevens doesn't talk a lot, but she's a bit of a social butterfly. She was a prom queen and, after a recent performance of the musical Fela!, she spontaneously hugged the dancers, nearly tackling them in excitement.

But Brittany, 21, who is disabled and suffers from seizures, incontinence, hearing loss, and other problems, spends most of her days alone in her North Philadelphia home, while her mother, Harlena Morton, goes to work as a high-school counselor.

Morton had hoped to find Brittany a job in a workshop that employs disabled adults. Now that Gov. Corbett has proposed large cuts to social services programs, Morton fears that Brittany and thousands like her will never get off waiting lists for those spots and for other services...

In Philadelphia, the cuts total about $120 million, not including reductions in medical care, city officials say; across Pennsylvania, $317 million, according to state officials.

Why is this mandate different from all other mandates?

One of the central concerns that conservatives have about the individual mandate is that it would lead to unlimited federal authority over our individual lives. If Congress can require us to purchase health insurance, conservatives sometimes ask, can’t it require us to purchase cars or broccoli or cell phones?

Defenders of the mandate have been so concerned to show that it is justifiable under the Commerce and Necessary and Proper clauses—and there the argument seems quite straightforward—that we have not been focused enough on making sure that we don’t prove too much. And that’s partly because we tend to be political progressives and are not as worried as conservatives about limiting federal power over our economic lives. We are not libertarians, after all. While we progressive are adamant about defending civil liberties, we generally don’t believe that there is a general right to economic liberty. And thus, unless government forces us to make purchases that reflect particular ideals or conceptions of how we should live our lives, we are not going to get too exercised about government directives in our economic lives.

Why progressives should worry about federal power

Homeless attack should not be ignored

I used to feel at home at Young Philly Politics, but it's time for this blog to start paying attention to Mayor Nutter's efforts to chase the homeless away from center city. People that don't only have a fake progressive. conscience could sign up to be at the table to feed the homeless twice, because now the third time in some places will result in a fine.

Thirty years ago I had hypoglycemia, without knowing what it was. I ended up panhandling for food struggling with myself not to eat out of trash cans and to buy peanut butter crackers instead of a cup of coffee drenched in sugar because I knew coffee as a meal made my concentration worse. However when a hurried commuter left a cup of coffee at the 40th and Woodland subway portal I finished it off.

Enclosed is a local link,
http://occupyphillymedia.org/content/shot-heard-around-world-dictator-nu...
Enclosed is Dallas, NY and other cities,
http://theeconomiccollapseblog.com/archives/feeding-the-homeless-banned-...
http://theeconomiccollapseblog.com/archives/feeding-the-homeless-banned-...
Enclosed is what I posted elsewhere,
http://phillyimc.org/en/jesus-would-be-arrested-feeding-homeless-banned-...

How about those who plan to be available to feed the homeless twice sign up with successive comments at the end of this blog

Making Super PACs Illegal.... How?

A new Washington Post- ABC News poll shows that almost 7 out of 10 voters believe that super PACs, the independent expenditure only committees created in the wake of the Supreme Court’s disastrous Citizens United decision, should be illegal. Super PACs are not responsible for all problems with American democracy, however, they do amplify those troubles so it is no surprise that the public is crying out in opposition to them. Unfortunately, due to the Court’s backwards interpretation of the first amendment, we cannot legislate away super PACs today. However, there are some very important steps that every level of government – from your city council to the White House - should take right now to mitigate the impact of super PACs before the 2012 election.

There are three main problems with super PACs: unlimited money, corporate money, and secret money.

Unlimited Money: Super PACs are allowed to raise unlimited funds from any given single source, which allows corporations and the ultra wealthy to directly translate economic success into political power. PennPIRG and Demos’ recent report Auctioning Democracy found that 96% of all super PAC funds came in contributions of $10,000 or more from just 1,096 sources. Forget the 1%, that political elite is actually the equivalent of .000351% of the population. In other words, unless you have $10,000 stashed away in a cookie jar to give to a political campaign, your contribution may be severely minimized.

The Return of Bigfoot: Telling the Truth about Welfare Spending in Pennsylvania

A blog post by Sharon Ward, originally published at Third and State.

BigfootYou may remember that the Commonwealth Foundation put out a report about welfare spending a couple of weeks ago that we likened to “Bigfoot” because it found something in the Department of Public Welfare — massive fraud, millions of non-working adults — that just didn’t exist.

I had a chance to debate Matt Brouillette of the Commonwealth Foundation on WITF’s Radio Smart Talk, and I thought it might be a good time to share the facts and give you my four big ideas about how we push back on the destructive framing that the “Bigfoot” report perpetuates.

First, let me give a shout out to the people who called in to Smart Talk to set the record straight on welfare spending and challenge Matt directly on his use of the welfare frame. It was clear to the listeners that Matt was quite deliberately trying to invoke the image of Ronald Reagan’s welfare queen by describing welfare as everything from afterschool programs to autism services. The audience wasn’t buying it and we shouldn’t allow it.

The first step  when talking about this issue, is to define welfare accurately.

1. Welfare is cash assistance.

Spending Twice as Much on Prisons as on Universities

A blog post by Chris Lilienthal, originally published at Third and State.

It is no secret that Governor Tom Corbett has proposed deep cuts to higher education institutions in Pennsylvania for the second year in a row.

But just what do those cuts mean? Well, we have two charts at the Pennsylvania Budget and Policy Center's web site that speak louder than words when it comes to funding cuts for colleges and universities.

If enacted, the Governor's 2012-13 budget will result in a funding cut for higher education of one-third since the start of the recession.

Public Colleges Cuts by One Third Since Start of Recession

This budget will also mean that come 2013 Pennsylvania will be spending twice as much on prisons as on colleges and universities.

In 2013 PA Will Spend Twice as Much on Prison as on Colleges and Universities

Just what we Need! A new City Council Tax Break for the .0000. . . . .1%!

Hey, did you tune in to Bill Green's press conference on his bill to eliminate City business taxes on hedge fund and mutual fund companies and managers? Did you see the two day wall to wall coverage by the Inky on the role of these once upon a time taxpayers and the pros and cons of letting them become freeloaders? You didn't? Oh, that's probably because this is a totally stealth deal that none of the moving parties has actually wanted to talk about. Yes, the bill was introduced like any other bill, but without a word being said in the press about it. Yes, it had a public hearing last week, but without a word being said in the press about it. Yes, you can look in vain for the press release on bill 120007.

If you look it up on Council's database, you'll find that after its hearing, Bill 120007 was amended (who knows how) and reported out of committee with a recommendation that the rules be suspended to allow first reading at the next session of Council. That means that it's on a fast track for approval. Waiting all of two weeks before Council passes it is a no-no. It's apparently an emergency to establish that next year our dearly beloved local hedge managers and mutual fund managers will pay no business or net profit taxes. Philadelphia can only wait one week to get that vital interest taken care of after Council's Finance Committee rushed to the rescue last Tuesday. How much will Bill 120007 cost the City, a City that is losing over $40 million in state social services funding next year if Corbett has his way (which he probably will)? Who knows? Who cares? Let the good times roll for the really great corporate citizens of hedge fund and mutual fund world. Let's bring all the white collar bandits to Philadelphia to bring us their tax revenue . . . or, oh, I guess not that. I guess we just get the bragging rights.

50 YEARS AGO THIS WEEK, JFK USHERED IN MODERN CONSUMER PROTECTION ERA

People of almost any age know a lot about the Kennedy administration with its optimistic beginnings and its sudden, tragic end. Yet many have probably never heard of one of JFK's important legacies -- his declaration that consumers have rights that deserve protection.

Fifty years ago, on March 15, 1962, President Kennedy issued his "Special Message to the Congress on Protecting the Consumer Interest." While his ambitious agenda has not been fully realized, the sweep of his vision bears revisiting.

Kennedy said,

If consumers are offered inferior products, if prices are exorbitant, if drugs are unsafe or worthless, if the consumer is unable to choose on an informed basis, then his dollar is wasted, his health and safety may be threatened, and the national interest suffers.

So, he identified and then called for government action to protect four consumer rights: The right to safety; the right to be informed; the right to choose; and the right to be heard. Other presidents and consumer organizations have added to his work -- proposing rights to consumer education and consumer redress, for example -- but those important additions simply built upon JFK's robust platform.

Kennedy called for enactment of legislation to guarantee the efficacy and safety of prescription drugs and cosmetics because: "Thousands of women have suffered burns and other injuries to the eyes, skin and hair by untested or inadequately tested beauty aids." He called for new food safety rules, which finally passed in 2010.

Above all, Kennedy said, "protection of the public health is not a game."

He called for passage of "truth in lending" legislation to end "serious abuses." He demanded both nutrition and other packaging labeling: "Just as consumers have the right to know what is in their credit contract, so also do they have the right to know what is in the package they buy."

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